• Prior was 50.9
• Final April reading was 51.0
• Final composite PMI 51.5 vs 51.7 prelim and 51.7 prior

The ISM services survey is due at the top of the hour, alongside factory orders.

Four of seven sectors expanded, down from five in April and the fewest since June 2025. Healthcare leading isn’t exactly cyclical expansion so be careful with any optimism here.

Consumer Services is concerning. At 47.5 it was the sharpest contraction of any sector, and it’s now shrunk in three of the last four months. This is the part of the economy that actually tracks the household — discretionary spending, the consumer’s willingness to show up — and it’s been bleeding since winter. Financials and Technology also slipped into contraction. So the three sectors most levered to demand, credit and risk appetite are all going the wrong way at the same time.

Basic Materials printed its fastest expansion since April 2022, Consumer Goods was robust but it could be pull-forward demand ahead of price hikes.

Basic Materials posted the steepest input-cost rise of any sector and the fastest pace of inflation in four years. So the one hot manufacturing print is tariff-distorted activity stacked on top of a four-year high in cost pressure. That’s the worst possible combination if you’re sitting at the Fed — activity you can’t trust and prices you can.

The composition here is the message: defensives leading, the consumer rolling over, cyclicals contracting, and a manufacturing pop built on front-running and rising costs. None of that is particularly positive.

This article was written by Adam Button at investinglive.com.